Pixel Points Inc

question 75

Essay

Pixel Points Inc. has a single class of shares. As at its year ended December 31, 2020, the company had 1,000,000 shares issued and outstanding. These shares have a book value of $5,000,000 on the balance sheet.
During 2021, Pixel Points repurchased 5% of the issued shares from one of the minority shareholders at a cost of $7 per share. The company held these shares in treasury and later found a buyer for half of these shares at $8 per share. The other shares were sold at $6 to another investor.
Required:
Assume the Pixel Points fallows the guidance in ASPE pertaining to accounting for equity transactions. Record the share transactions using the two-transaction method for treasury shares.

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Definitions:

Meritocracy

A system in which advancement and rewards are allocated based on individual abilities and merits rather than on the basis of social status, wealth, or other external factors.

American Dream

The belief that anyone, regardless of where they were born or what class they were born into, can attain their own version of success in a society where upward mobility is possible for everyone.

Sociologists

Scholars or researchers who study social behavior, institutions, and structures from various perspectives within the field of sociology.

Criticisms

The expression of disapproval of someone or something based on perceived faults or mistakes.